Keurig Green Mountain (GMCR) On Momo Momentum Watch Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Keurig Green Mountain ( GMCR) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Keurig Green Mountain as such a stock due to the following factors:

  • GMCR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $216.3 million.
  • GMCR has a PE ratio of 41.7.
  • GMCR is currently in the upper 30% of its 1-year range.
  • GMCR is in the upper 25% of its 20-day range.
  • GMCR is in the upper 35% of its 5-day range.
  • GMCR is currently trading above yesterday's high.
  • GMCR has experienced a gap between today's open and yesterday's close of 1.2%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on GMCR:

Keurig Green Mountain, Inc. is engaged in the specialty coffee and coffeemaker businesses in the United States and Canada. The company operates through two segments, Domestic and Canada. The stock currently has a dividend yield of 0.7%. GMCR has a PE ratio of 41.7. Currently there are 6 analysts that rate Keurig Green Mountain a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Keurig Green Mountain has been 1.6 million shares per day over the past 30 days. Keurig Green Mountain has a market cap of $25.1 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 2.42 and a short float of 5% with 4.51 days to cover. Shares are up 102.2% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Keurig Green Mountain as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • GMCR's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GMCR's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GMCR has a quick ratio of 2.32, which demonstrates the ability of the company to cover short-term liquidity needs.
  • KEURIG GREEN MOUNTAIN INC has improved earnings per share by 23.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KEURIG GREEN MOUNTAIN INC increased its bottom line by earning $3.16 versus $2.28 in the prior year. This year, the market expects an improvement in earnings ($3.80 versus $3.16).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Food Products industry average. The net income increased by 33.4% when compared to the same quarter one year prior, rising from $116.27 million to $155.15 million.
  • 49.91% is the gross profit margin for KEURIG GREEN MOUNTAIN INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.17% is above that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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